While many people use the Memorial Day weekend holiday to have family gatherings and barbeques, others use it as an opportunity to complete house cleaning projects. This may include chances to donate old clothes, furniture and electronics to charities. As we have noted in prior posts, deductions can reduce your taxable income so that less taxes will be required.
Even though our readers may not be thinking about how donations will affect their 2016 tax return, it is helpful to follow these guidelines so that tax preparation can be easier when the time comes.
The charity must be a qualified entity – Most charities that take worn clothing or furniture will be obvious in their 501c3 status (i.e. their non-profit status), but you have to make sure of this in order for your donation to be tax deductible. So if you’re not giving to a noted religious organization and or service group, be certain to check out a company’s non-profit status.
Donate acceptable items – While this may seem obvious, it is important to know what the organization you are donating to accepts and how their rules work. For example, clothes to be donated should be gently used and free from major defects. Additionally, computers must be functional for the most part and virus free. Cars may have some damage to them as many are donated so that they can be repaired.
Keep your receipts– As always, you should keep your receipts if you are donating items that are worth more than $250.00. This is particularly important if you plan to itemize your deductions.